Retail Management Information Systems

Flow of Information – Steps

 The billing clerk issues sale receipt for the product
 The purchase information is recorded in the POS terminal and sent
to the buying / planning department
 The Purchase information is aggregated and a purchase information
is created. It is sent to the vendor through EDI (Electronic data
Interchange)
 Buying / planning department negotiates with the vendor for the
shipping dates and terms of purchase
 Buying department communicates with the distribution centre /
stores to coordinate deliveries from the vendor and to the stores
 Store manager also communicates with the distribution centre to
coordinate deliveries and check inventory status
 Retail Management Information Systems

Data Warehousing
 It is the coordinated and periodic copying of data from various
sources both inside and outside the enterprise, into an environment
ready for analytical and informational processing

 Analysts from various levels of the retail operation extract

information from the data warehouse for taking marketing decisions
about developing and replenishing merchandise assortments

 Data warehouse also contains information about the customers,

which is used to target promotions and group products together in
stores
 Retail Management Information Systems

Electronic Data Intrerchange

 EDI is the computer to computer exchange of business documents
from retailer to vendor and back.

 In addition to sales data, purchase orders, invoices and data about

the returned merchandise are transmitted from retailer to the vendor

 Advanced Shipping Note (ASN) is an electronic document received

by the retailer’s computer from a supplier in advance of a shipment

 EDI can be transmitted through following ways;

• Proprietary EDI systems
• Intranets
• Extranets
 Retail Management Information Systems

Logistics
 It is the part of Supply chain process that plans, implements and
control the efficient, effective flow and storage of goods, services nad
related information from the point of origin to the point of
consumption in order to meet customer requirements

 Different types of merchandise flow;

 Flow from vendor to the distribution centre
 from distribution centre to the stores
 alternatively from vendor directly to the stores

UPC (Universal product Code) is the black and white bar code
printed on the package of products
 Retail Management Information Systems

Various Retaile processes recorded in the information systems

 Inbound transportation
• Receiving and checking
• Stores and Cross docking
• Getting merchandize floor ready
• Shipping merchandize to Stores

 Outbound transportation
 Reverse Logistics

Quick Response (QR) Delivery systems are inventory management

systems designed to reduce the retailer’s lead time for receiving
merchandize, thereby lowering inventory investment and improving
customer service levels
 Retail Management Information Systems

Benefits of QR Systems
 Reduce lead time
 Increase product availability and lowers inventory investment
 Reduces logistics expenses

Outsourcing
o Third party logistics companies
o Transportation
o Warehousing
o Freight Forwarders
 Retail Audits
Study of a selected sample of retail outlets, provided as subscription-
based service by market research firms. Retail-audit service providers
gather information on a brand's sales volume, sales trends, stock
levels, effectiveness of in-store display and promotion efforts, and
other associated aspects.

What is Retail Audit?

It is a tool that opens up new option for strategic move in the market.
It helps every Marketer to find an optimum Brand/Product portfolio
for target segment with finest communication vehicle and the flexible
interiors for high product accessibility.

Sales representatives perform retail audits to check that products are

correctly priced, positioned, and stocked at retail outlets. You can
conduct retail audits on your own organization's products and a
competitor's product
 Retail Audits
How to perform a Retail Audit?

To perform a retail audit the marketer should keep the following

views in mind.

1. Psychographics of consumers- To Draft Retail value chain

2. Brand Portfolio –To fill retail value chain draft with brands
and products
3. Retail Format- To fill the retail value chain draft with resources.
4. Service blue prints- Connect the resources and brand/products in
a retail value chain.
 Retail Audits
Psychographic of consumers:
The value chain blue prints of retail must be design with
consumer psychographic in mind. The following questions must
be answered while designing the value chain blue prints.
1. What is life style of your consumers?
2. How much time they plan for shopping?
3. What is the key driver for shopping (passing time, Money)?
4. What vehicle they use usually to travel?
5. What is their disposable income?
6. Are they brand, Price or value conscious or a subset of it (BPV Analysis)?
The POC (Psychographic of consumers) helps to draft the value
chain blue print for a retail business. Moving further will serve
the purpose to check what brands /product mix we have to fill the
draft of value chain.
 Retail Audits
Brand Portfolio:
It defines the brand /product span that we have to click the
consumers. Every retail product line must have a combination of
products for serving the two basic strategic purposes.
a. Penetration builders
b. Profit builders

Most of brand/product retail portfolio is based on proliferation

but if you see the effects in the long term it will cause
PRODUCT PLACEMENT INSUFFICIENCY. The symptoms
can be concluded by the increasing footfall but stagnation of
conversion rate.
 Retail Audits
Retail Format:

It has to fill the value chain of retail by resources. The main

objective of retail format should be to make consumers process
of shopping very cozy. The factors which affect the process are:
a. People involved
b. System Involved
c. Infrastructure (Show Room space, Parking space, interiors,
sitting arrangement)
 Retail Audits
Service Blue Prints:

It connects the brand or product with the resources for

accessibility to consumers. Service is not only inside the show
room but also outside (parking facilitating and others).

How to analyze your performance of retail audit?

The end result of RETAIL AUDIT must be to increase the
profit /square feet. Behind this figure enhancement, you can
guess the mechanism of each unit and factor under a system.
 Online Retailing
E-tailing, or online Retailing
It was the Future group’s foray into e-tailing in 2007 that started the
trend, though Fabmall was the first e-tailer in India (it set up an online
shop in the late 1990s). Shoppers Stop followed by its e-tailing
venture in late 2008 and so did the Anil Ambani-owned ADAG group,
which launched RelianceMoneyMall the same year

The Internet and Mobile Association of India (IAMAI) has pegged

the e-commerce market in India at Rs 9,210 crore. The market is
estimated to grow 30 per cent year-on-year. E-retailing comes under e-
commerce.

 E-tailing helps retailers build loyal customers and is aimed at

selling in areas where they don’t have a physical presence
 E-tailing, or Online Retailing

In FY09, Future Bazaar sold Rs 122 crore worth of goods, 1.5 per
cent of total sales of the Future group. By 2011, we expect it to be 2-3
per cent. Worldwide, it contributes 7-10 per cent of sales,” he said .
Electronic goods and apparel are the most bought products online

 Online marketplaces help create trade between metros and Tier II &
III cities by bridging the demand and supply gap.

 Moreover, e-tailing helps retailers save on the real estate cost. Also,
an e-tailer does not have to carry huge inventories and can cut supply
chain costs.

It has other cost factors like delivery, technology, etc. Hence, It’s
not cheaper
 E-tailing, or Online Retailing

Incidentally, e-tailing is not limited to retailers. FMCG major

Amway also launched its own e-tailing portal in 2008

For the direct-selling company, the online medium is aimed at

expanding the company’s existing distribution network across 500,000
Amway Business Owners and also to tap the vast semi-urban
customers base with direct access to Amway’s product range

E-tailing is the practice of selling retail goods on the internet. It is

the abbreviated version of “electronic retailing” which essentially
constitutes business to consumer transaction.
 Global Retailing
 Modern consumers are nowadays internationally focused as result
of their experience, technological development and movement to new
countries and locations

 Retailers now locate themselves in different countries to satisfy the

needs and aspirations of customers, who are exposed to different
products and services across the world

 Consumer look for global products I.e. those products that have
worldwide markets across various cultures ‘

 A retailer internationalize its operations when it carries them in two

or more nations of the world
 Global Retailing

 Internationalization is the act of crossing international boundaries

with business interests

 International retailer is one that sells directly to consumers through

shops or other forms of distribution in more than one country

 Many retailer turn global, after they have established firmly in the
domestic markets

 Some retailer use mix strategy for international development

They go for International acquisitions, Rebranding or introducing
separate brand formats
 Global Retailing

Reasons for Internationalization

 Gaining access to larger markets, hence increase in sales and profits
 Gaining access to resources, raw material, vendors, etc.
 Gaining access to new technologies, management practices, etc.
 To counter competition

Key influencing factors in Internationalization of Retailers

 Regulatory environment is different
 Substantial investment is required for establishing the brand in
foreign markets
 Internal re-organization of the company is required
 Legal issues in Retailing
The Indian government relaxed outdated foreign direct investment
(FDI) laws to grant limited entry to overseas companies in 2006

 In India, single-brand foreign retailers can now own a controlling

share of a business - up to 51 per cent - provided they gain
government approval and sell only their own goods.

 Until now, foreign food retailers were forbidden to enter the

market, in a bid to protect local businesses and domestic supermarket
chains.

This has helped UK-based Marks and Spencers, specialising in

private label products, and food service companies such as
McDonalds and Pizza Hut that until now were forced to operate a
franchise system.
 Legal issues in Retailing

International retail giants can only operate wholesale outfits -

despite recent pressure by Tesco and Wal-Mart bosses to influence
policy.

The legislative changes brought improvements to the FDI ration in

wholesale, yet foreign retailers are still restricted from building
supermarket networks.

Instead they can now own 100 per cent of their Indian wholesale
operations, without seeking governmental approval.

 PwC states that the organised retail sector, comprised of regional or

national chains, is set to grow to 10 per cent by 2010, representing a
huge opportunity for prospective players.
 Legal issues in Retailing

The government is now set to initiate a second wave of reforms in

the segment by liberalizing investment norms further.

This will not only favor the retail sector develop in terms of design
concept, construction quality and providing modern amenities but will
also help in creating a consumer-friendly environment.
Retail industry in India is at the crossroads but the future of the
consumer markets is promising as the market is growing, government
policies are becoming more favorable and emerging technologies are
facilitating operations in India.
As foreign investors cautiously test the Indian Markets for
investments in the retail sector, local companies and joint ventures are
expected to be more advantageously positioned than the purely foreign
ones in the evolving India's organized retailing industry.
 Ethical issues in Retailing
Ethical Challenges fall into three interconnected categories:

 Ethics: It relates to retailer’s moral principles and values.

 Social Responsibility : A retailer exhibiting social responsibility

acts in the best interests of society – as well as itself. The challenge is
to balance corporate citizenship with a fair level of profits for stock
holders, management, and employees.

 Consumerism: It relates to the activities of government, business

and other organizations that are designed to protect individuals from
practices infringing upon their rights as consumers
 Ethical issues in Retailing

Green Issues
 The emphasis is on the marketing activities of companies and their
operations related to local and global sustainability of different
resources

 Retailers need to identify and quantify the processes and activities

of their operations in relation to the use of material and energy

 They must discontinue sales and display of products that are not
eco-friendly

 The packaging of the labels sold should be in the eco-friendly paper

/ material